FSB Proposes Draft Data Set for Compensation Data Reporting

As part of its broader effort to address misconduct risk at large, globally active banks, the Basel, Switzerland-based Financial Stability Board today requested public comment on draft recommendations for compensation data reporting. These “better practices for data gathering and reporting,” as the FSB put it, are intended to help national bank regulators more consistently assess the role of compensation in misconduct risk.

The proposed data set encompasses compensation frameworks to address misconduct risk and the governance and compensation actions taken in the event of misconduct. It is designed to help banks and regulators determine whether governance and risk management processes include conduct considerations in designing their compensation structures, performance management systems and incentive models.

The FSB said that these recommendations are aimed at the largest “significant financial institutions” and that they “do not establish new principles or standards beyond those already established.” Comments are due by July 6. For more information, contact ABA’s Hu Benton.